OTC Market in India – Growth drivers of Indian OTC Market

OTC Market in India

Globally, the Indian pharmaceutical industry ranks 3rd in terms of volume and 14th in terms of value. In 2011 Indian OTC market was estimated at $ 1.7 billion with an annual growth rate of 23%.

Currently India ranks 11th in terms of the OTC market size globally which is forecasted to be close to $ 6.5 billion by 2016.

There are many growth drivers which have contributed significantly to such growth of OTC market in India. Some of the drivers are explained here.

Growth drivers of OTC Market in India :

1. RISING AWARENESS AMONGST CONSUMERS

Rising awareness about preventive care is driving the growth of various categories like nutraceuticals, vitamins and dietary supplements. People now feel and know that prevention in long term not only saves the overall healthcare cost but also keeps them healthy on a day to day basis

2. SELF MEDICATION TENDENCY

Growing preference for self medication due to higher education levels thereby increasing the confidence to self medicate. The major cause of this trend is the lack of time for small ailments in today’s stressful life. The people also save on the consulting fees which they have to pay to doctors plus the time being lost which encourages them to self medicate in certain situations for ailments like headache, stomachache, cold and cough etc.

3. LIFESTYLE FACTORS:

With increasing busy lifestyles people are looking for quick and easy solution which is synonymous to their fast life style. Some products which have made use of this need of consumers are Amrutanjan , Digene Fast melt, Vicks Vapocool signifying quickness of their products ion. Increased demand owing to changing lifestyle habits boosted the growth of gastrointestinal by 8% in 2013. (Nicholas hall)

4. RISING PURCHASING POWER PARITY OF CONSUMERS

5. PSYCHOLOGICAL FACTORS/ MINDSET CHANGE

Movement of people toward preventative healthcare in order to avoid falling sick and perform well in today’s hectic and competitive environment led to the growth of various OTC categories like Vitamins and dietary supplements

6. PRODUCT INNOVATION

Introduction of smaller packs (a concept of FMCG industry) has also driven the access of products in terms of:

Being economical and affordable to masses

Convenience in carrying. Ex; Amrutanjan balm comes in a 5g pack which is convenient to carry for consumers

7. PROMOTION

1. Use of Mass Media

Heavy promotion and marketing campaigns through Television, Print,Outdoor and digital promotion is leading to the increase in the demand of these products.

2. Endorsements by Celebrities:

Endorsements of celebrities with the brands. Ex, Mary Kom for Polycrol Gel, Sonali bendre for Volini, Salman Khan for Revital . Using Mary Kom strengthened position of Polycrol gel in East India where it is now leading the chart at No. 1 position.

8. CHANNELS DEVELOPMENT

Availability of products in hypermarkets, grocery retailers ,healthcare specialist retailers led to increase in sales of OTC products .These channels increases convenience for consumers to shop such products while making their day to day shopping

9. RISING AWARENESSABOUT SAFETY

With rise in awareness about side effects and the potential risks of allopathic medicines, there has been a rise in demand for natural medicines and remedies ( categories like cough, cold, allergy remedies, digestive remedies , vitamins and dietary supplements) leading to a rise in the movement towards some herbal/traditional products, which are believed to be safer while still being effective. Ex; Dabur Chyawanprash, Himani Sona Chandi Chyawanprash and Zandu Kesari Jivan, are particularly popular in such segment due to promotional themes which are supported by aggressive promotional activities.

10. RURAL PENETRATION :

Rural penetration initiative by many companies like Ranbaxy, Mankind, Pfizer, Dabur India Ltd has increased the accessibility of the brands in Tier 2 and Tier 3 cities. For Ex; Ranbaxy and Pfizer partnered with ITC to distribute their range of OTC products Revital, Pepfiz,Volini and cough syrup Chericof.

11. PRODUCT INNOVATIONS:

Product innovations which happened in various categories (ex, gastrointestinal) also drove the category sales and hence impacted the overall market.

1. ENO launched tablets with different flavours and packaging, where traditionally it has been only in powder formats. The entire antacids category is close to (US$125mn) in 2013 where ENO is around $ 40 million with 32% Market share. ENO also launched Refreshing liquid (ENO GEL).Launch offered two advantages:

Direct head on with competitors in the same format

Targeted consumers who wants ease and convenience.

2. Polycrol extra strong packaging in a portable transparent bottle with an informative label that helps consumers understand how it works in the stomach

12. EXPLORING NEW POSITIONING :

Finding a new position for the categories and linking it with the brand have helped brands to carve a different image in consumers mind.

Positioning of oral rehydration treatments in areas prone to extreme heat ( Ex; Electral Football campaigns held in Goa was such an attempt to strengthen the message delivery ).

13. EVOLUTION OF DIGITAL MEDIA:

Use of digital Media : Ranbaxy has used extensively the use of digital media to promote Revital, Volini and Pepfiz.

The Pepfiz campaign was conducted via Facebook and asked participants questions about food for a chance to be declared India’s Biggest Foodie.

Revital facebok page alone has a liking by more than 3.5 lakh people ,Amrutanjan roll on balm has more than 40,000 likes . This provides an active platform for the brands to engage and converse with the consumers.